Tuesday, 12 July 2016

Buy 'Old School' Tech Stocks Like Cisco Systems (CSCO), CNBC Contributors Say

Old School' tech stocks such as Cisco Systems (CSCO) are great places to find yield and low valuation, CNBC contributors Sarat Sethi and Pete Najarian discussed today.

NEW YORK (TheStreet) -- Invest in "old school" tech stocks such as Cisco Systems (CSCO) , CNBC contributor Sarat Sethi advised on "Fast Money: Halftime Report" Monday.

"Old school tech" stocks like Cisco, Intel (INTC) and QUALCOMM (QCOM) have "no debt, increasing dividends, increasing cash flow, they're in the cloud. They're not as sexy as your Amazons (AMZN) of the world or your Googles (GOOGL) of the world, but they're consistent," Sethi argued.

Tech company stocks are also where investors can get yield, a "very" low valuation and the "potential" for growth, CNBC contributor Pete Najarian commented.

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"You're talking about names with very low valuation, so you don't feel like you're chasing the utilities at those higher valuations and yet you're seeing a lot of names that are 2.5%, 3% yields which is what people are starved for right now," Najarian said.

In addition, old school tech has "valuation support, so you have consistent reoccurring revenue," Sethi noted.

Shares of Cisco are higher by 0.75% to $29.48, Intel stock is climbing by 1.26% to $34.43 and QUALCOMM shares are up by 0.27% to $54.33 this afternoon.

(Cisco is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells CSCO? Learn more now.)

Separately, TheStreet Ratings rated Cisco as a "buy" with a score of A-.

This is based on the convergence of positive investment measures, which can be seen in multiple areas, such as its notable return on equity, expanding profit margins, solid stock price performance, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures.

Although the company may harbor some minor weaknesses, TheStreet Ratings feesl they are unlikely to have a significant impact on results.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

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